Missouri’s health department could revoke a series of marijuana micro-licenses awarded in the Kansas City-area to secretive LLCs tied to a Wyoming company.
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The micro-licenses near Kansas City are among 32 across the state at risk of being stripped over questions about their eligibility for a program aimed at helping small and minority-owned businesses break into Missouri’s lucrative marijuana market.
The Missouri Department of Health and Senior Services said last week it could not verify the eligibility of 32 of the 57 companies or individuals it awarded marijuana micro-licenses to in July. The state has not yet stripped the licenses but has sent letters to the license holders giving them 30 days to respond and provide records explaining why they should not be revoked.
The announcement comes as the micro-license program has been dogged by concerns about predatory behavior within the industry. The Star reported last month that seven of the 15 licenses in the Kansas City-area were tied to a Wyoming incorporating service and the beneficiaries could not be easily identified.
Those seven licenses are among the 32 at risk of being stripped.
The state, when it announced the eligibility review, did not say explicitly why each license could be revoked. But the issues found by the department included failure by some license-holders to prove that the owners qualified for the license and failure by others to prove that the company would be operated by individuals eligible for the program.
The program was designed to help marginalized groups break into the market, which has been dominated by large companies. Applicants had to meet one of several requirements, including having a net worth of less than $250,000 or having a prior marijuana-related charge.
Of the 32 licenses that the department could not verify, 17 were dispensary licenses and 15 were wholesale — or cultivation — licenses. The announcement comes after Missouri in March officially revoked nine micro-licenses after the first round of the micro-license lottery. Two of those licenses were connected to a Michigan-based company accused of predatory behavior.
Lisa Cox, a spokesperson for DHSS, in an email reiterated that the license-holders had 30 days to submit documents demonstrating why the licenses shouldn’t be stripped.
“During and following this period, the Department conducts a documentation review to determine if the information provided demonstrates why the license is eligible and should not be revoked,” Cox said. “In the last round, it was about 3 months following this phase that we were able to confirm those being revoked.”
The Star reported last month on seven of the licenses that were connected to Wyoming Corporate Services in Cheyenne, Wyoming. The company incorporates or sets up, businesses for clients.
One of the licenses now at risk of being stripped was awarded to a company called DRAMA DUNES LLC, which listed its proposed address along Squire Court in Grain Valley.
Records posted online by DHSS list a person named Yossi Sarshar, who appears to own a nightclub in Dallas, Texas, as the designated contact for the license and another one with a proposed address in Excelsior Springs. Sarshar is also listed as the contact for 41 other licenses submitted to the state.
Sarshar did not immediately respond to a call for comment on Monday. The Star was also unable to reach the designated contacts for three other licenses at risk of being stripped. All of the phone numbers had identical automated voicemail messages.
Concerns about the program, designed to help marginalized communities, comes as hundreds of small-time applicants have lost out on the chance to grow or sell legal weed. Suzette Leftwich, a Black woman from Kansas City, was one of hundreds of applicants denied a micro-license to open a dispensary in July.
“We’re working against, you know, forces that we don’t even know exist. It makes me angry,” Leftwich told The Star last month. “It doesn’t seem like it’s homegrown people that are, you know, creating these dispensaries.”
Leftwich did not immediately return a call for comment on Monday.
Not all of the micro-licenses awarded by Missouri in July are at risk of being stripped. Hunter Schmitt, a local attorney, won one of the micro-licenses through an LLC called Flower to the People and hopes to open a dispensary in the metro. Schmitt is listed as the designated contact for the company and his business partner, attorney Nicolas Cirese, is the LLC organizer.
Schmitt, who qualified for the license due to a past marijuana-related charge, said on Monday that he followed the state rules when he applied for a license. He did not want to comment on the licenses that could be revoked.
“All I can tell you is that we followed all the rules that the state of Missouri and (Division of Cannabis Regulation) require,” he said. “I don’t know about anyone else’s licenses. I know we followed the rules.”
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